The warning signs for the toy industry started last year when "Cars 3" — considered a surefire success — proved lackluster for licensees such as Mattel Inc.
Now, toymakers' big bets on movie tie-ins look downright bleak. Sales of toys based on the "Star Wars" saga — the franchise that kicked off the whole phenomenon four decades ago — were down in 2017 despite a new film, "Star Wars: The Last Jedi," in December during the all-important holiday-shopping season.
Call it "movie fatigue," said Gerrick Johnson, an analyst for BMO Capital Markets. Hollywood and toymakers have fixated on toy-friendly films at a time when kids are increasingly turning to YouTube, Netflix and social media for entertainment.
"There are so many screens now; kids aren't just at the movies," Johnson said. "A movie doesn't have the same resonance it used to."
Familiarity also might be part of the problem. After a decade without a "Star Wars" film, Disney has released three movies since December 2015, and another one is coming in May.
"The Last Jedi" also didn't include many memorable new characters, Johnson said. Adult collectors are still buying a lot of merchandise when the toys come out, but demand dies down afterward, he said.
That doesn't bode well for Hasbro Inc., which has the main "Star Wars" toy partnership, or Jakks Pacific Inc., which has a secondary license. Jakks said that it couldn't comment on "Star Wars" sales, but that merchandise tied to "Moana," another Disney film, "remains very strong." Hasbro declined to comment.
Tracey Gordon of Glendale, Calif., said her three boys, ages 2 to 7, aren't "Star Wars" fans. She wore a Princess Leia costume on Halloween for years when she was younger.
"It's a generational thing," she said, adding that her nephew likes the toys largely because his dad "drags him to see the movies."
Sales connected to "Cars 3" also came up short of expectations. The 2006 original was one of the industry's stalwarts. Combining memorable characters with a classic kid plaything — a car — it remained a top-selling licensed brand for years after its release. Disney opened a Cars Land attraction at its California Adventure park in Anaheim, Calif., in 2012 that drew hourslong wait times for its signature ride.
But the third film came out in a crowded field, followed the next several weekends by the latest "Transformers," "Despicable Me" and "Spider-Man" movies. It didn't help that "Cars 3" got so-so reviews.
Even more toy-licensed films are scheduled, including the prequel "Solo: A 'Star Wars' Story" and new "Transformers," "Fantastic Beasts," "Jurassic World" and superhero fare. The lesson toymakers will draw from the 2017 slate is that they can't just rely on the movie to do the marketing anymore.
